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Based on our ACR submitted to ATO for FY 2016-2021, they have issued a Letter of Decision giving recommendations to clients. the client made an arrangement with ATO to rectify the issues, ask payment plan/extension of time to pay the in house ssets. Do we need to issue an ACR for FY 2022 onwards until all contraventions are fully rectified or we quote the Letter of Decision in our Management Report. Pls advise what to do. Thanks
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It's not up to the accountant or client to decide the outcome of the audit. GS009 means you have to gather evidence and draw a conclusion. Not be told what that conclusion is (also an APES110 possible issue).
Unfortunately the ATO couldn't care less than the accountant and client will lean on the auditor, nor with the fact that clients don't like ACRs and will withhold payment, but that's another rant for another time.
As others have said if it's in the 1A/1B tables, test 4 mandates continued reporting until it's fully rectified.
You can put the expected date of rectification in the report, along with the agreement with the ATO in the "explain including any mitigating circumstances" box, which may placate the accountant/client.
Hello Maria
Thanks for the question. Even though the contravention has previously been reported in an Auditor Contravention Report to the ATO, Test 4 requires that a contravention that first occurred in an earlier year needs to be disclosed so long as it remains unrectified. The contravention still remains unrectified even if there is a rectification plan in place that the ATO has agreed to.
It has been assumed that the contravention in question is listed in tables 1A or 1B (link provided directly below):
https://www.ato.gov.au/forms-and-instructions/auditor-actuary-contravention-report-instructions/how-to-complete-the-report?anchor=Table1A#Table1A
Test 4 is provided below:
Test 4: Trustee behaviour test
You must report a contravention of a section or regulation listed in tables 1A and 1B where an identified contravention from a previous financial year has not been rectified at the time of the current audit.
Where the event contravenes a section or regulation only at the time it occurs (for example, a section 66 contravention), but it remains unrectified in the following years, it should continue to be reported. Even though the contravention does not actually occur in the following years, it should be reported under the section that was originally contravened.
The Auditors Institute
Difficult to say without knowing what the exact details are. However, I think it's a good idea to report if in any doubt whatsoever.
Pls I appreciate your answers, as I need to finalise the audit. The accountant /Client said that they already paid the fines by ATO for the breaches as per Letter of Decision and should not have any ACR and will no longer issue ACR . Pls I appreciate your prompt reply. Thanks